China cuts interest rates to boost economy

26 November 2008 11:03  [Source: ICIS news]

SINGAPORE (ICIS news)--China’s central bank announced on Wednesday a 108 basis point cut in its interest rates, its biggest in years, to boost lending and consumption amid weakness in the economy.

 

The People's Bank of China said its one-year lending rate would be 5.58% and its one-year deposit rate 2.52% effective from Thursday.

 

The reserve requirement was also reduced by 1 percentage point for the six big banks and by 2 percentage points for smaller banks in a bid to flush the system with more cash to encourage lending.

 

This is the fourth time in three months that China eased its monetary policy as its manufacturing sector began to reel from softening global demand.

 

China’s economic growth is expected to slow to single-digit levels this year, snapping five years of double-digit growth, with further weakness expected in 2009.

 

The World Bank projected China’s GDP growth would slow to 7.5% in 2009 from an expected 9.4% this year, with export growth decelerating significantly to 3.5% next year from 11% this year.

 

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By: Pearl Bantillo
+65 6780 4359

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

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